Welcomed Revisions to Missouri’s Partial Fire Loss Statute (379.150)

January 18, 2022

By Alexa Lester

This past summer, Missouri Gov. Parson signed House Bill 604 into law. HB 604 restructured, amended and clarified Missouri’s Partial Loss Statute (RSMo. § 379.150). The revisions to Section 379.150 include substantial improvements over the prior version and should be a welcomed change for property claim professionals handling Missouri property losses.

The new version of Section 379.150 provides:

Any fire insurance policy issued or renewed on or after August 28, 2021, shall be construed to require that a partial loss caused by fire be adjusted in accordance with the following language which shall be considered part of the standard fire insurance policy for Missouri under the provisions of section 379.160: “It shall be optional with the company to settle the loss at the actual cash value or to repair, rebuild or replace the property destroyed or damaged with other of like kind or quality within a reasonable time, on giving notice of its intention within thirty days or after the receipt of the proof of loss herein required.” However, if any fire policy provides coverage for a partial loss caused by fire, in a policy form determined and approved by the director to be at least as favorable to the insured as the standard fire insurance policy for Missouri, then the insurer issuing the policy shall adjust the loss in accordance with the policy form. Notwithstanding any administrative rule to the contrary, nothing in this section shall be construed to create a general contractor relationship by the company to the insured.

RSMo. § 379.150 (emphasis added).

Missouri’s newly revised partial loss statute still only applies to fire losses. Additionally, the statute now expressly states that if the applicable insurance policy has been determined and approved by the Director of the Department of Insurance to be at least as favorable to the insured as the standard fire insurance policy for Missouri, then the carrier shall adjust the loss in accordance with the policy form.

The most significant change to Section 379.150 is the express change making it optional with the carrier, rather than the insured, to either settle loss at actual cash value, or repair, rebuild or replace the property destroyed or damaged with other of like kind or quality within a reasonable time.  If a carrier elects to repair, replace or rebuild, then that election does not create a general contractor relationship by the company to the insured.

In sum, the revisions to Missouri’s partial fire loss statute should be a welcomed change for claim professionals handling fire losses in Missouri.  Specifically, the revised statute (1) gives the carrier the option to repair, replace or rebuild; (2) if a carrier elects to pursue that option to repair, replace, or rebuild, it does not create a general contractor relationship between the carrier and the insured; and (3) carriers can now simply settle fire losses in accordance with the settlement, valuation and loss payable provisions contained the policy, so long as the policy is at least as favorable to the insured as the standard fire insurance policy for Missouri.